Many questions on here is in regards to buying property. The first thing people think of when deciding to become a Landlord is buying the property. Once they buy the property then what? Oh my gosh, there's a lot of work to be done to the property. Then, Oh my gosh, how do I find a tenant? Then Oh my Gosh, now what?
So you need to have plan that goes way beyond buying that rental.
It's easy to purchase a rental, but can you keep it? That is the question.
My husband was the handyman (well we had a work crew, but hubby was the ultimate handyman, perfectionist to an annoying fault...even to this day everything has to be perfect)
I on the other hand, was the Zoo Keeper, oops I mean I took care of the nasty stuff, like tenant complaints, accounting, court scenes, making the tenants comply to their lease agreement. I was the bad guy, and my husband was the good guy. But....without each other, we wouldn't have succeeded. We wouldn't have been able to Keep our rentals.
He was good at what he did and still does. This enabled us to KEEP OUR BUSINESS.
I am good at what I do. This enabled us to KEEP OUR BUSINESS
Where we good when we first began? ARE YOU KIDDING ME! Dumb and Dumber!!!!
But with embarrassment and lots of goofs it forced ME to study, and finally I became good!
So...for you young whipper snappers out there, there's more to buying a rental property. If you want to Keep it, you've got to learn what it takes. Sometimes you need a Good guy and a Bad Guy, even if you have to be both at one time!
Just a little tip from this old gal....Nancy Neville
@Nancy Neville: I couldnt agree with you more. As I am getting ready to initiate the due diligence process, I am realizing how that process is a small portion of the effort that is or will be required. As someone in BP mentioned, the real work starts once you have closed on the property. At the moment I am doing an inventory of all the systems I need to set in place prior to closing and it is a staggering list but one that will need to be tackled. Would love to hear more about your experience and I am sure there are plenty of folks on BP who would be benefit from your experience.
Well Mohammed, As an Inner City Landlord my years of experience would equal 100 years or more because there is nothing I haven't seen or been through. From flying bullets, to drugs and prostitution, to Welfare applicants who own BMW's and Coach purses....then to the most kindness and fun loving tenants I am lucky to have had.
I have lived through furnaces being stolen from the property, water heaters taken, siding removed from the houses that had siding, Copper pipes being ripped out of our houses, to Ministers who rented our homes saying they could visualize themselves living there forever, but inside meaning to never pay the rent of course.
To tenants falling down stairs and taking the railing with them as they stumbled down them, to dogs chewing up the basement tiles. To bugs, and critters, drug dealers who when they moved, dismantle the stairway leading up to the bedrooms, because the stairs is where they stashed their stuff.
My husband has been shot at, we have had squatters, drive by shootings, many times over. Taken to court over grass being over 1 1/2 inches high in the alley. (I won the case). to mice, tenant fights, leaky roofs, attached by tenants, and lots of hugs and tears from those who loved me.
All this stuff, how to interact with all types of personalities, doesn't come in books. You don't know how you will act when faced with some of the stuff landlords face.
Neighbors and fellow workers never know the "tenant" as a landlord knows that person. We see the other side of them.
I've seen Police Officers leave our house filled with roaches, Ministers using our homes as a church, one tenant wanted to use our home as a Funeral Parlor, and work on the bodies in the basement. (Or tended to do it, until I found out their intentions the day we were going to sign the lease, and I told them no way!!!! See around kiddo!!! LOL
Landlording was exciting! Exhausting! Challenging! Sad! Frustrating! Loving! Filled me intellectually. But it was both scary, because everything we do in this business we face a great deal of responsibility. We face losing everything by just one simple mistake. We even jeopardize our lives.
We face Law suits, are responsible for our tenants lives, building codes, neighbors, our reputation, and worry about how to keep our tenants long term and happy. We face damages, evictions, staying ahead of the game every day, every moment. Because no matter how experience we are, something new always pops up, something new that I had to resolve or solve or master.
Landlording and QuickBooks is what made me tick. (Hubby too)
Sigh, sometimes I miss it, but this old gal can do more now this way than getting back into it again.
I must be in a writing mood. I have a story for you.
We purchased a 4plex for $10,000.00 and put 100 grand into it. Great neighborhood and a great apartment building. All new Anderson windows in every room, not to mention furnaces and water heaters and walls!
Tenant moves in the upper unit. It's winter. He calls us and says the house is drafty. Lots of wind blowing through the windows. My husband and I tell him that we just put in new windows, Anderson Windows, and he insisted wind was coming through the windows and he was cold.
We told him we would be out the next day to take a look, but before we got there he had called the City on us. (Little does he know that we had to have it inspected and get a C of A and a C of O before we could even rent it out so no violations were filed against, but this guy didn't know that). We asked him why since we said we'd be there this morning. He said because we were slumlords.
He started cussing us out about the drafty windows and acting like the big guy. Now this guy is 6' 5" and now he is going off on my husband. (Now one thing tenants should never do, is make my husband mad. He is the type that will make them offer they can't refuse, if you know what I mean, that's why my husband has me. So I knew I had to do something and quick). So... I ran to the car, grabbed my portable voice recorded, shoved it under the tenants nose, (I'm 5"2", so I had a long way to reach) and said, "you have something to say, you say it in this. His wife ran up the stairs crying, and the tenant began to stutter, and had nothing more to say. So hubby and I and the tenant go upstairs to check out these windows, only to find out that they were opened!!!!
Ya just gotta love this stuff. They ended up moving.
Anne the best way is to make sure you join a Landlord Association in your town. They are your best friend. They have attorneys as speakers, and the interaction between landlords and investors is priceless. Just like here, but in person.
fix and flip, fix and flip, fix and flip, Nancy you can have the tenants. You can buy and hold. hehehehehehehehhehehhehehe
I think landlording is all dependent on your strategy and market.
Although I have only been doing this for about 6 years I can only think of one major issue I had with a tenant. In the end I didn't even lose any $$, just had some stress for a few months.
Reason is I've bought properties in class -A neighborhoods and done well with tenant screening.
My downside is that the returns aren't great and I don't have a lot of units because they are so expensive to acquire.
Originally posted by @Mohammed S. :
... As I am getting ready to initiate the due diligence process, I am realizing how that process is a small portion of the effort that is or will be required. As someone in BP mentioned, the real work starts once you have closed on the property. At the moment I am doing an inventory of all the systems I need to set in place prior to closing and it is a staggering list but one that will need to be tackled. ...
Although you might need a number of "systems" in order to manage a rental, it is unlikely that you will need ALL of them immediately after closing. If vacant, you will need to get it fixed up, get it advertised, show it, and screen tenants for example; you won't have to do an eviction right away then. If non-paying tenants come with the unit, getting them evicted will be the first thing you need to do, followed by those other things. But you can put those pieces in place as the need arises ...
@Nancy Neville I love your stories. You should sit down and compile them all into a book. You would have a good time writing that and I think the community would love to read all those stories!
I think the headaches mostly come from uneducated, lower income tenants. Why are lower income tenants mostly a headache? It's all part of the cycle of poverty and if you have ever dealt with these kinds of tenants you will understand.
Kids grow up having their family being evicted a time or two and suddenly, that's just "normal". You can't pay your rent, you get evicted, you move on with life. They don't understand the idea that suddenly, 50% or more of the places you would like to live are now unavailable to you because you're a pariah to landlords because you have that eviction on your record. The other 50% of landlords that will rent to you probably don't care enough about their properties or you as a tenant. (Slumlords!)
They rent places with things broken saying "yeah, that will get fixed" and it never does. So the kids listen to the parents complain about how landlords never fix anything even if they pay the rent. That talk and belief gets instilled into their heads at an early age. Now those kids grow up to become renters and they've got the mindset that if the place gets bad enough with the landlord not fixing things, they'll just move, and if they don't have the money they just don't pay rent. If they get evicted they'll just find somewhere else (albeit not high quality). It's Tenant vs. Landlord. So the cycle continues.
I'm sure there are other things tenants "learn" from their parents too -- how to get on the government system of food stamps, food hand-outs, rental assistance, emergency assistance, energy assistance, etc. There are a lot of programs to help people in America because America is the land of opportunity. However, people tend to use these programs as a crutch instead of hand-up. When I was young, my family used food stamps and energy assistance for a while. (Anyone remember the recession of the 1980s?) But it was always under the belief that this was only "temporary" and we just had to work hard to get away from that. So I don't fault these assistance programs; they are a good way to help people in need.
My overall message is that I agree with Nancy -- you have to KEEP your rentals if you're going to succeed as a buy and hold landlord. That doesn't mean "set it and forget it" but "gain it and maintain it". If you don't want headache properties, don't buy in neighborhoods with "bugs, thugs, and drugs" but instead buy in neighborhoods with people who take care of the properties, pay their rent on time and in full, and are generally good to get along with.
I think having a good property manager is key, we all want to do it ourselves, I have found that just having 3 rental properties can totally consume you. Maintenance, rent collection, more rent collection, inspections, turn over, utility transfers, emergency, theft, late night calls just to say hello! etc. It can get out of hand very quickly. I always suggest to do your own research and explore property management companies, while their are many out there only a few offer great service at a great value. It can be a hard decision, but most long term investors (as opposed to flippers) never look back once they find someone they like. At that point it becomes a sit back a wait on your check kind of life. With that being said, their are many companies out their who sell you a great package but can't/won't deliver. So be cautious.
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